In its response Monday to an inquiry from Sen. Elizabeth Warren (D-MA) regarding its plans for the inclusion of private market investments in defined contribution retirement plans, Empower emphasized the importance of evolving the retirement system to offer carefully regulated access to private equity, credit, and real estate investments for everyday savers.
“The retirement landscape is changing, and it’s clear that limiting access to private markets in defined contribution plans no longer serves the best interests of American workers.”
Edmund F. Murphy III
“The retirement landscape is changing, and it’s clear that limiting access to private markets in defined contribution plans no longer serves the best interests of American workers,” said Edmund F. Murphy III, President and CEO of Empower, in a media statement released today. “To deliver stronger, more diversified retirement outcomes, we must thoughtfully remove these barriers. Empower is committed to leading this evolution with the necessary safeguards and fiduciary rigor to protect and advance the interests of millions of savers.”
In its response letter to Warren, Empower noted the U.S. has seen a nearly 50% decline in the number of publicly listed companies since the 1990s. Meanwhile, the global private equity market has grown to over $13 trillion, capturing the majority of early-stage growth that everyday investors increasingly cannot access through traditional retirement plans.
Empower’s response said this isn’t because of their ability to understand risk or plan responsibly, but because access has historically been limited to institutional investors and the wealthy.
“It’s time to change that. Empower believes in the democratization of private investing,” Empower’s response from Murphy said.
Empower’s own research, conducted in June 2025, reveals strong support from American workers for access to private markets in their 401(k) plans:
- 79% believe retail investors should have access to the same investment products as institutions.
- 76% want their employers or 401(k) providers to offer modern investment options.
- 72% believe private market exposure could improve long-term retirement outcomes.
- 73% say it would help level the playing field for everyday investors.
“These findings underscore a significant trend: Americans want more diversified tools to build long-term wealth in a market environment where the number of public investing opportunities has declined,” the response letter states. “As public markets investing has undergone this structural change, it is our duty to adapt our offerings and provide our customers with new means of investing.”
Empower approach emphasizes safeguards
Empower said in its media statement that its proposal outlines a framework prioritizing participant protection and fiduciary oversight:
- Employer vetting: Private investments can only be included if plan fiduciaries determine they meet ERISA’s prudent standard.
- Advisor accountability: All investment managers advising to private investments must be ERISA-compliant and act in participants’ best interests.
- Portfolio design safeguards: Exposure to private markets is limited within diversified investment vehicles to control risk.
“This is not about opening the floodgates,” Murphy said. “It’s about providing secure, professionally managed options that reflect where the markets—and the opportunities—are today.”
Call for public-private collaboration
Empower concluded its response by emphasizing that progress in the U.S. retirement system has always come from cooperation between the public and private sectors.
“Retirement security should evolve with the economy,” Murphy said. “Just as we embraced innovations like index funds and auto enrollment, we now need to thoughtfully expand the investment universe. We look forward to working with policymakers and regulators to do so responsibly.”
More background
Empower’s May 14 announcement that the industry’s second-largest recordkeeper serving more than 19 million Americans will offer private markets investments to retirement plans triggered the letter from Warren, ranking member of the Senate Banking Committee, which was sent on June 18 and requested a response from Empower by July 7.
“Given the sector’s weak investor protections, its lack of transparency, expensive management fees, and unsubstantiated claims of high returns, we are seeking information on how your company will ensure the safety of the billions of dollars of retirement savings it safeguards as it implements this program,” Warren wrote in the letter.
“Pensions’ investments in private equity have been dubbed a ‘Wall Street time bomb.’ Even institutional investors admit their uncertainty as to whether private equity’s ‘very thin outperformance is worth the risk of opaque and illiquid investments whose actual value is often impossible to determine—investments that could crater when the money is most needed,’” the letter continued.
Read Empower’s response letter here.
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